Allocating Nitrogen Discharge Allowances in the Lake Rotorua
Catchment: DRAFT PAPER TO REGIONAL COUNCIL
Purpose
To identify the position that Regional Council will use when determining Nitrogen Discharge
Allowances as part of the potential new rules for the Lake Rotorua catchment.
Summary
Staff’s recommended approach for allocating Nitrogen Discharge Allowances under the
current draft rule structure is provided in Table 1 below:
Rules
category
Rule 11 status
2017 start point
2032 NDA
Benchmarked
Benchmark
Function of compliant land use and
nitrogen benchmark
3
Greater than
40 ha
2
1
Not Benchmarked
Current
Benchmarked
Benchmark
Function of current land use and a N
discharge based on average sector
benchmark data or other data for the
01-04 period
3
2-40 ha
Consented
Function of compliant land use and
nitrogen benchmark
2
1
Function of current land use and a N
discharge based on average sector
benchmark data or other good for the
01-04 period
Not Benchmarked
Current
Benchmarked
Undecided
N/A
Not Benchmarked
Undecided
N/A
Benchmarked
No limit
No limit
Not Benchmarked
No limit
No limit
2-40 ha
Permitted
Less than 2
ha
1
Where current is defined as a 3 year period from 2010-2013
2
Where current is defined using the 2011 aerial photography
3
Generally "compliant" is the benchmarked land use however where the land use has changed
without exceeding the properties benchmark e.g. some dairy conversions, this could also fit as
compliant" provided the benchmark has not been exceeded.
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Background
Staff are currently working with the Lake Rotorua Catchment Stakeholder Advisory Group
(StAG) on new nitrogen rules for the Rotorua catchment. New rules are required to give
effect to the Bay of Plenty Regional Policy Statement which requires that the total amount of
nitrogen that enters Lake Rotorua shall not exceed 435 tonnes per annum.
A key piece of work by StAG and staff has been the proposed framework to deliver Lake
Rotorua’s sustainable nitrogen limit as an integrated programme of Nitrogen Discharge
Allowances (NDAs), incentives and gorse conversion. In September 2013, the Strategy
Policy and Planning Committee approved and endorsed this framework:
Rules Programme – 140 tonne reduction
By 2015
Farm Nutrient
Plans
Plans will be put in place for every farm, setting out a
practical pathway of staged nitrogen reductions.
By 2017
Resource
consents
Farms will be consented, with a Farm Nutrient Plan as a
consent condition.
By 2032
Nitrogen
Discharge
Allowances
Average of 35 kgN/ha/yr for dairy and 13 kgN/ha/yr for
drystock, with adjustments made for geophysical and
farm system characteristics.
$5.5m available to support meeting the requirements of the rules and to engage with the
incentives fund.
Incentives Programme – 100 tonne reduction
By 2022
Incentives fund
$40m “below the line” to remove 100 tonnes of nitrogen.
Gorse Programme – 30 tonne reduction
By 2022
Gorse fund
Separate funding to remove 30 tonnes of nitrogen from
gorse.
A draft rule structure has since been developed to deliver the Rules Programme in the
framework:
1. A sector-based range approach to allocating Nitrogen Discharge Allowances, noting
that staff are seeking feedback from the community on alternative allocation options.
2. A rule hierarchy that includes:
a. a permitted activity class for properties smaller than 40 hectares with nitrogen
loss less than 10 kgN/ha/yr
b. a 20 year controlled activity consent for those showing managed reduction in
a Farm Nutrient Plan
c. an option for a five year restricted discretionary consent for those not
demonstrating managed reduction.
3. Farm Nutrient Plans will be a condition of consent and will require standard minimum
information.
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4. All properties larger than 2 hectares will have information reporting requirements to
ensure compliance with either permitted activity status or resource consent
conditions; and Council will commit to monitoring permitted activities.
In June 2014, the Regional Direction and Delivery Committee approved this draft rule
structure for consultation. The consultation period was 14 July through to 14 October 2014
(extended to 31 October) and staff will be reporting back to this Committee on outcomes of
the consultation at a workshop on 7 November, 2014.
Council intends to notify a proposed plan change with rules to manage nitrogen loss in the
Lake Rotorua catchment in March 2015. In the lead up to notification, direction from Council
is required on certain aspects of the rules. This paper deals with the process to determine
Nitrogen Discharge Allowances. Further direction will also be sought in December and early
in 2015 on other aspects of the rules.
Allocation of Nitrogen Discharge Allowances
Policy WL 5B of the Regional Policy Statement requires contaminants within limits to be
allocated amongst land use activities in the Rotorua Te Arawa lakes. Staff and StAG have
spent a considerable amount of time over the last two years deliberating on the most
appropriate way to do this for the Lake Rotorua catchment.
The allocation of specific Nitrogen Discharge Allowances to individual properties is a critical
component of the agreed framework and the draft rules. A fact sheet on allocating nitrogen
and potential approaches was prepared for the consultation process and provides a good
overview of where we are currently at – see Appendix 1.
At this stage, the preferred approach to allocating nitrogen is a sector based approach with
ranges around a fixed average:
Decisions will need to be made on the preferred approach to allocation prior to notification in
March. A stakeholder workshop on the issue has been scheduled for 11 December and will
consider views expressed by the community through consultation, as well as existing and
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new impact assessment information. Following this workshop, direction will be sought from
Council early in 2015.
In the meantime however, confirmation is sought on the position that will be used when
determining the Nitrogen Discharge Allowances:
1.
2.
3.
Clarifying the starting point for getting down to the allocated NDA
Determining the land use of a property when allocating a sector based NDA
Determining whether allocation is based on effective area or total area
Landowners are asking for this level of NDA policy detail in order to help them understand
what the rules might mean for them. The incentives programme will be operative shortly and
nitrogen purchase decisions will also need to be informed by this detail.
Clarifying starting points
NDAs that are allocated to individual properties will need to be achieved by 2032. It is
expected that resource consents will be required from 2017, supported by a Farm Nutrient
Plan that shows the “current” nitrogen discharge associated with the property and a pathway
of managed reduction down to the NDA. This “current” discharge is essentially the starting
point for the property.
There is an assumption that “current” would be defined as the discharge associated with the
property at the time of consent (ie 2017). However, there are several issues around using
“current” that indicate it may not necessarily be appropriate.
Issue 1: current discharges may be lower than the benchmark that has been issued to the
property.
For example, a landowner may have already invested in mitigations and reduced the
nitrogen loss on the farm. Using the benchmark, rather than the lower current loss as a
starting point would mean that the landowner would have more flexibility in meeting the
NDA.
An example of this is shown in Figure 1 below where a property has a benchmark of 70kg
N/ha, a current loss of 50kg N/ha and a Nitrogen Discharge Allowance of 30kg N/ha. If the
starting point is the benchmark (70kg) the early actions of that landowner is recognised and
no further action is required for several years. However, if the starting point is current loss
(50kg) early mitigation is not recognised and therefore that landowner must show managed
reductions right from day one.
Ultimately, the landowner is required to reach the Nitrogen Discharge Allowance by 2032.
There is a risk in this scenario that the landowner could intensify for a period of time so a
caveat is required that current discharges cannot be exceeded.
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Issue 2: Current discharges may be higher than the benchmark that has been issued for the
property.
Figure 2 shows a scenario where current loss is 80kg N/ha but the benchmark is 70kg N/ha.
Under this the landowner is not complying with Rule 11. Using current nitrogen loss (80kg)
as the starting point would allow the non-compliance to continue for several years which is
not appropriate. Rather, the starting point should be set as the benchmark (70kg) and a plan
should be in place to reduce nitrogen to compliant levels.
Given the above issues, where a benchmark exists staff consider it is the most appropriate
starting point for the property.
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Where a benchmark has not been set for a property (most properties less than 40ha), a
proxy start point is required. Benchmarking was based on 2001-04 activities so it is virtually
impossible to back-calculate nitrogen loss associated with the land over 10 years ago with
any certainty.
In some cases, the property’s nitrogen loss will have increased since 2001-04, particularly
where dairy support grazing has increased. Consistent with national trends, there is
anecdotal evidence of a large increase in dairy support grazing within the Lake Rotorua
catchment, much of it on smaller blocks that have never been benchmarked. It is not clear if
such landowners were aware that such intensification was in breach of Rule 11. However,
there is no practical, comprehensive and robust means of proving this on an individual
property basis
The most pragmatic approach is to allocate the start point as “current” where current is
defined as a 3 year period from 2010-2013.
Recommendation: That the starting point for getting down to the Nitrogen Discharge
Allowance will be the property benchmark. Where no benchmark exists the starting point will
be nitrogen loss associated with 2010-2013 activities.
Determining land use for allocation
At this stage, the draft NDAs proposed are sector based. This means allocation is critically
dependant on understanding the relevant land use on each property – the dairy grazing
platform of a farm will get a dairy sector allocation, the sheep grazing platform of a farm will
get a drystock allocation.
Rule 11 has already capped nitrogen discharges in the Rotorua catchment at 2001-04
levels, and placed constraints on land use activities. It is therefore appropriate to make sure
that any land use referenced in allocation is consistent with this current regulatory
framework.
The simplest approach is to confirm 2001-04 as the land use reference point for allocation.
That is, the land use from which the Rule 11 benchmarks were derived will be the land use
used to determine the allocation of NDAs. Although not all pastoral properties were
benchmarked, all dairy land within the surface catchment has been benchmarked. Aerial
photography from the 2001-04 period can therefore be used to determine drystock and
forested land uses, subject to some additional work to clarify dairy versus drystock land use
in the additional groundwater catchment area.
Another approach would be to use current land use as the reference point. Substantive
changes in land use since 2001-04 are limited to:
•
•
•
Two conversions from drystock to dairy within their respective Rule 11
benchmarks
Three conversions from dairy to drystock for a range of reasons
Where landowners have retired pasture into trees, which may have been
accompanied by intensification of their remaining effective pastoral area.
Where land use has changed since 2001-04, the reference point matters. Appendix 2
provides some graphical scenarios of how the NDA allocation process is likely to work under
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the new rules. Example 3 shows a scenario where a farmer has retired some of their
effective area and intensified the remaining area. The benchmark hasn’t changed, but the
land use has gone from 75% drystock to 50% drystock. Using 2001-04 land use for NDA
allocation would be more advantageous than current land use.
Alternatively, Example 4 shows a scenario where a farmer has increased their effective area
by removing trees, and has lowered their intensity across the whole area. Again, the
benchmark hasn’t changed but the land use has gone from 75% drystock to 100% drystock.
Using current land use would be more advantageous to the landowner than 2001-04 land
use under this scenario.
A reasonable way forward is to determine the appropriate land use for allocation through the
farm nutrient plan process, using the most favourable of either 2001-04 or current (2013)
land use.
This is unlikely to have an impact on our ability to meet our nitrogen reduction targets given
the small scale of changes that have occurred under the Rule 11 constraints. However, it will
make a significant difference for those landowners who have made changes to the way they
manage their farms.
Under this approach it would be important to specify that no land use change outside of the
Rule 11 constraints would be recognised. If land has been intensified without authority, only
the authorised land use would be recognised.
Where a benchmark has not been issued, a proxy land use reference point will also need to
be determined. In this situation it is recommended that the land use to be used for
determining the NDA be “current” land use where current is defined using the 2011 aerial
photography.
Where benchmarked discharge loss is also required to determine the Nitrogen Discharge
Allowance (e.g. for determining the appropriate Nitrogen Discharge Allowance within a
sector range), it will be assumed that the benchmark for the property is the benchmarked
average for that sector unless data can be provided from the 2001-04 period.
Recommendation: That the land use referred to in allocating Nitrogen Discharge Allowances
is the compliant land use associated with the property where a benchmark exists. Where no
benchmark exists, land use will be determined through 2011 aerial photos and the assumed
benchmark will be the benchmarked average for that sector unless data can be provided
from the 2001-04 period.
Determining whether allocation is based on effective area or total area
Stakeholders have asked for clarification on how Nitrogen Discharge Allowances would be
allocated for properties. Modelling has relied on the effective land use being the basis for
the Nitrogen Discharge Allowance (e.g. milking platform or runoff block), rather than property
type (e.g. dairy farm). This means that a property’s Nitrogen Discharge Allowance would be
the sum of all relevant land use parcels that occur on that property.
The concept of “effective area” and how it could apply through the allocation process is
relatively complex. The 100ha square farm scenarios help explain how it might work in
practice (see Appendix 2).
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Questions have been raised about whether the Nitrogen Discharge Allowance should
actually be allocated on the total area, rather than the sum of all effective areas of the farm.
It has been suggested that this could be a simpler process that determining all the different
effective areas on a farm and allocating different NDAs to each area.
However, allocation on total area would be problematic for a number of reasons. In Example
1 of Appendix 2, allocating a “dairy” allowance across the total farm rather than the effective
dairy platform would give a Nitrogen Discharge Allowance of 35kg N/ha – higher than the
actual benchmark associated with the property, and higher than the 21.5kg N/ha Allowance
provided using effective area.
In example 2 of Appendix 2, allocating a “drystock” allowance across the total area would
give a Nitrogen Discharge Allowance of 13kg N/ha rather than the Allowance of 10.5kg N/ha
provided using effective area.
Across the catchment, most Nitrogen Discharge Allowances would be higher if allocated
using total area rather than effective area, which will undermine our ability to achieve the
435t limit if allocation.
Further, benchmarking has already been based on effective area and it makes sense to
keep the two processes consistent.
Recommendation: That Nitrogen Discharge Allowances will be based on effective area not
total area.
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